Ireland – Filling a hole in the market

The domestic pallet market in the UK is maturing fast, with multiple networks now fighting each other for a share of the cake. However, in Ireland, the sector is still in its infancy.
Ace Express Pallets was the first to launch a hub-andspoke operation earlier this year, followed in July by PalletXpress, an offshoot of logistics operator Transland Group.

The man behind the newest service, Transland MD Kieran Conlon, says: "We were carrying out pallet distribution in Dublin and local areas ourselves, and other hauliers serving other destinations.

"Outsourcing to third-party carriers meant we didn't have enough control over PODs, which weren't being processed fast enough, or invoices. This created problems for customers'key performance indicators, " he says.

"You have two options, do it yourself or form a cooperative. Last year, I met up with Liam Carroll, to whom Transland already outsourced its UK/Ireland traffic, Paschal Taggart, a local entrepreneur, and Tom Carr, then MD of Dublinbased BPprint management group Colorprint and now MD of PalletXpress.

"We looked at the feasibility of setting up a pallet network, spoke to like-minded hauliers and put together a business plan. Now we have 10 members, eight of which are shareholders." Another two members will soon be added, and PalletXpress has set a ceiling of 20. The network specialises in smaller consignments of between one and six pallets.

Freight from the 32 counties (north and south) is consolidated nightly at a central hub at Mullingar, Co Westmeath and the pallets are distributed next day throughout Ireland.

Investment in the network so far has been The staff roll currently stands at 10 but Conlon envisages expanding to 40 within two years.

Members include Howley Distribution in Dublin, Roche Freight in Wexford, Executive Logistics in Cork, Liam Carroll Transport in Tipperary, Go-Trans in Limerick and Woodside Distribution in Antrim.

"Members are responsible for collection and delivery within their own areas. They are substantially reducing their operating costs, and congestion/pollution is reduced by operating at night-time and taking traffic away from Dublin-bound routes, " says Conlon.

"Our members are a mixture of small and large hauliers, with quality being the main priority. However, demographics show that there are parts of the country which are not so busy, so in certain cases larger members take part-loads from smaller ones.

"You have to look at what has happened in the UK.

Palletways moves 12,000 pallets through its hub every night and others up to 8,000.

Here in Ireland, the concept is only just starting and we have to be the market leader." He is already thinking about his next move, which is to use the new network to build on Transland's expertise as a contract logistics provider.

"Most of the 3PLs are in Dublin but we would like to seduce people to the centre of Ireland, using our central hub and the resources of the members, turning it into a logistics centre and attracting the multiples, " says Conlon.

"We want to offer services, like pick and pack, that will take cost out of the business for our customers, " he adds.

Transland has certainly come a long way since its inception in 1992. After entering the market as a groupage operator to the continent, Conlon became involved in magazine distribution.

"We had an opportunity to a put a solution together for IPC Marketforce [the publisher's magazine distribution unit]. It was looking for a carrier to give next-day service to the Irish market and we became the link between the UK and the Irish wholesaler." Subsequently, Transland won three other magazine distribution contracts and now carries 80% of magazines brought into Ireland from the UK. That amounts to about 1,500 titles per week weighing 600 tonnes.

Conlon uses sub-contracted haulage. "Transland is not a haulier but a logistics provider, so we provide solutions to transport needs.

Hauliers have to have the critical mass. An operator with 20-30 trucks can't possibly offer the same prices as an organisation with a fleet of 500 trucks.

Outsourcing to these large operators allows us to be competitive as well as flexible." He uses four primary carriers between Ireland and Transland's UK depot in Birkenhead: Liam Carrol, Nolan, Curran and AFTS.

Meanwhile, in the parcels sector, rival operators are considering last month's announcement by An Post, the Irish post office, that it is to close its loss-making SDS parcel and courier division.

Brendan O'Neil, CEO of Interlink, is doubtful that it will push huge volumes his way. "We're dealing in different sectors really. We tend to go after the higher yield customers. It's too early to tell what effect the closure will have on the market but of course it will re-align it, creating more market share for existing players or new ones." Seamus McBrien, MD of Target Express Ireland, is already experiencing this. He has had numerous requests for business since An Post's announcement, particularly in the home delivery market.

O'Neil says Interlink's turnover this year will be 1215% up on 2003. "This is partly due to the change in the mix. There has been a 15% increase in volumes as we deal with more and more large customers." Key market sectors include electronics, pharmaceuticals and communications/IT.

Despite the hi-tech downturn reported by many operators, McBrien says IT volumes are rising. "Our customers are as busy as ever; companies that have left Ireland were not our customers anyway." Interlink is in the process of purchasing the land for a new hub in Athlone, set to open in 2006. "There is enough room in the current facility to take us up until 2005, but after that a new hub will be needed. That one will cater for 10 years of growth, " O'Neil says.

This month, Target opened a new main sorting hub at Damastown, Dublin. Its previous Ballycoolin site is now dedicated to parcels.

"Our plan is eventually to build a parcels centre next to the new facility. Damastown is 20 minutes from the airport, which is important for our nightly plane between Dublin and Coventry, " says McBrien.

Three sectors – domestic, air and Irish Sea – are all performing well for Target.

"We hope to get a larger aircraft by the end of this month, " McBrien says. There is plenty of business out there, he reckons, if you want to compete with companies willing to work for less than cost.

"But we don't get involved with that; we offer a good quality service for good quality rates."

Posted: 13/09/2004